Court vacates non-guideline sentence

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A non-guideline sentence that rests primarily on facts not unique to a particular defendant, but reflect attributes common to all defendants, is inherently suspect, the Seventh Circuit held on Aug. 14.

As a result, the court vacated a sentence of one day, when the guideline range was 24 to 30 months.

Darryl Wallace pleaded guilty to wire fraud. The calculated amount of intended loss was $400,000, although Wallace only spent $30,000 of it, and the guideline range was, as noted, 24 to 30 months.

In requesting a below-guideline sentence of one year and a day, Wallace asked the court to consider a number of factors: his parents divorced when he was 8 years old; he was raised in a tough neighborhood; he endured sexual abuse at school; he lost his brother and stepfather in a fire; and he witnessed his sister being struck and killed by a car. He also claimed that, after his arrest, he learned from a psychologist that he was addicted to gambling and suffered “recurrent, mild Major Depressive Disorder.”

Wallace also cited post-arrest rehabilitation and the aberrance of his crime relative to his entire life.

The sentencing court imposed a sentence of three years probation plus a $2,000 fine. The court also ordered that he attend psychological counseling and Gamblers Anonymous.

The court cited that the intended loss far exceeded the actual loss, Wallace’s gambling, his “extraordinary remorse,” and that, in spite of a difficult childhood and psychological problems, he had led an exemplary life “until he faltered and did this one ridiculous, stupid crime.”

The government appealed the sentence, and the Seventh Circuit reversed in a decision by Judge Diane P. Wood.

The court began by quoting U.S. v. Dean, 414 F.3d 725, 729 (7th Cir. 2006), that the farther a sentence departs from the guidelines, the more compelling the justification must be.

The court stated, “In other words, the new regime imposes a procedural obligation on the district court judge to explain what it is that persuaded her to choose the sentence she did.”

After a discussion of the meaning of the word, “reasonableness,” the court observed, “an unreasonable application of federal law is different from an incorrect application of federal law.”

The court then quoted the following statement of the Second Circuit in U.S. v. Rattoballi, 452 F.3d 127, 133 (2d Cir.2006), with approval: “we will view as inherently suspect a non-Guidelines sentence that rests primarily on factors that are not unique or personal to a particular defendant, but instead reflects attributes common to all defendants.”

In Rattoballi, the district court gave the following reasons for a below-guideline sentence: the defendant’s admission of guilt; the hardship of the criminal process; the severe toll that the case had taken on the defendant’s business; and the role that another person had played in the scheme.

The Second Circuit found that all were common attributes, and vacated the below-guideline sentence.

Commenting on the Second Circuit’s approach, the Seventh Circuit wrote, “The distinction between common and individualized factors is one that is compatible with our decisions.”

The court cited its rejection of a below-guideline sentence to ameliorate the severity of the 100:1 ratio between powder and crack cocaine. The court explained, “Only after computing the guidelines range using the correct 100:1 ratio does the district judge have discretion to impose a sentence that is above or below that range, as long as she respects statutory maxima and minima, if the factors outlined in sec. 3553(a) indicate that such a sentence would be reasonable for the particular defendant.”

The court concluded, “reasonableness is something that must be assessed at retail; wholesale conclusions that are nothing but disagreements with the guidelines are impermissible.”

The court then cited a very similar and very recent Eleventh Circuit case for support. U.S. v. Crisp, 2006 WL 1867754 (11th Cir. July 7, 2006).

Crisp also involved a white collar criminal who stole nearly half a million dollars. The guideline range was 24 to 30 months, but the government filed a substantial assistance motion, requesting a sentence of 12 months.

The district court, however, went further, and imposed five hours imprisonment, and five years supervised release. The Eleventh Circuit held the sentence unreasonable and reversed.

The Seventh Circuit, turning back to Wallace’s case, also reversed the sentence.

The court found that all of the factors given by the district court for a belo
w-guideline sentence were individual to Wallace, except one — the gravity of his crime as measured by actual loss rather than intended loss.

This factor, the court characterized as “something that will be common to a great number of partially successful financial crimes.”

The court concluded, “Although the court’s review of Wallace’s individual traits was helpful, we are troubled by the fact that the judge said that she thought that culpability should be measured by actual loss rather than intended loss. This was not an appropriate consideration, as the guidelines have already made the judgment that intended loss is what counts.”

The court added, “Every defendant who commits a financial crime and gets away with only some of the money will make exactly the same argument — as Rattoballi put it, this is an attribute common to all defendants.”

Calling the sentence the district court imposed a “one-hundred percent reduction in sentence,” the government had argued that the permissible considerations are insufficient to warrant such a drastic departure from the guideline.

However, the court rejected the government’s reasoning, stating, “We are reluctant to distill the reasonableness inquiry into a numbers game that relies only on a numerical or percentage line for reductions.”

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The court noted that the percentage reduction will always seem larger the lower the guideline sentence.

The government also argued that Wallace’s lack of prior criminal history is an impermissible reason for a below-guideline sentence, because Wallace’s Category I criminal history already reflects that.

However, the court noted that a defendant can fall into Category I, even if he has one prior criminal history point, or he has expired convictions; Wallace had neither.

The court thus concluded that Wallace’s lack of criminal history is grounds for a below-guideline sentence.

Despite rejecting a number of the government’s arguments, the court ultimately held that the sentencing court failed to adequately justify the sentence.

The court wrote, “In the end, it is the fact that the court chose to eliminate any meaningful incarceration for a crime that involved $400,000 of intended loss that makes this such an extraordinary choice. … Even though our standard of review is deferential, we cannot be left to guess at the district court’s rationale in a case like this.”

Accordingly, the court vacated the sentence, and remanded for further proceedings.

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David Ziemer can be reached by email.